Tuesday, 11 February 2020

Ferry Fiasco

The Herald reports on the CalMac 'ferry fiasco' which seems to show another area of public policy in a very poor light.

Only this time, just like the recent NHS scandals or problems with falling education standards, the Scottish Government is not in a position to blame someone else for its troubles. 



Nicola Sturgeon dragged into £200m CalMac ferry fiasco

By Tom Gordon - The Herald

Pictures Mark Gibson Newsquest Media GroupPictured Workers on the new Hybrid withFirst Minister Nicola Sturgeon as she made a visit to Ferguson Marine shipbuilders in Port Glasgow this morning to reveal that the firm is the preferred tenderer

NICOLA Sturgeon announced the award and price of a disastrous contract for two CalMac ferries before it was finalised, MSPs have heard.

Billionaire Jim McColl said the First Minister publicly declared the price-tag was £97m while his Ferguson Marine yard and the state ferry firm CMAL were still haggling over the cost.

“We were told that because it was publicly announced we were stuck with it,” he told the Holyrood inquiry into how the contract went wrong.

Ms Sturgeon made a hastily arranged visit to the Port Glasgow yard in August 2015 in an apparent attempt to steal the thunder from then Tory Chancellor George Osborne, who was announcing an extra £500m for the Faslane nuclear base later the same day.

Mr McColl also accused Finance Secretary Derek Mackay of having “defamed” the management at Ferguson Marine in a parliamentary statement.

Mr Mackay last year told MSPs previous management at the yard had been “disastrous”.

The Scottish Tories said it was clear the scandal went to the very top of the Government.

Mr McColl also said criticisms of the yard contained in a recent report by Government appointed turnaround director Tim Hair were “absolutely scandalous”.

He said Mr Hair’s claim that 95 per cent of the design work had yet to be agreed after five years was “nonsense”, and that 60 to 70% had been agreed.

Mr McColl’s Clyde Blowers empire took over Ferguson Marine in Port Glasgow in 2014.

The following year, Caledonian Maritime Assets Ltd (CMAL), the state owned firm behind CalMac, awarded it a contract to build two new CalMac ferries.

However the contract was plagued by significant design changes, delays and disputes over cost, with the yard’s management and CMAL blaming each other.

Ferguson Marine went into administration last year before being nationalised.

The boats are expected to cost double the original price and be delivered four years late.

The Scottish Government has also written down £45m of taxpayer-funded loans to Ferguson Marine to help it through cash flow problems, taking the total bill to around £250m.

Mr McColl told the committee Ferguson’s, the last civilian shipyard on the Clyde, had initially calculated it could do the work for £105m, and CMAL tried to negotiate it down to £97m.

He said the yard was ready to do the work for no profit, with the vessels acting as a “good reference” for future contracts.

He said: “We were in negotiations with CMAL to try to get it down to £97m.

“Before we agreed the negotiation the First Minister announced we had been picked as preferred bidder and the price would be £97m.

“They said ‘It’s been announced by the First Minister and you will just have to accept it.’”

He said that CMAL had probably told the First Minister the work was achievable for £97m.

He also said he was prepared “to take a small hit” in order to do the work as a showcase for winning more orders.

Mr McColl said CMAL had refused to discuss arbitration to sort the breakdown in the relationship with Ferguson Marine.

He said: “I had to make a personal appeal to the First Minister to get them round the table. “The chairman of CMAL refused 14 times to get involved.”

Mr McColl also claimed Ferguson’s had to ban an individual from CMAL from the yard because he was “bullying people on the yard”.

The Monaco-based tycoon also accused the Scottish Government of withholding "key documents" from the inquiry about the "mess" on dubiopus pretexts.

He also said he had had a meeting with Mr Mackay in which the Finance Secretary had ordered his officials out of the room and told him privately that he could not force CMAL to accept mediation as the entire board had threatened to quit en masse if he did.

Earlier, MSPs heard CMAL was “remarkably difficult” and “aggressive” as the contract went wrong.

Luke van Beek, a former independent adviser to the Scottish Government on shipbuilding, said some CMAL actions were “very unhelpful”.

Mr van Beek said CMAL should have agreed most of the design and build specifications before the work on the design and build contract began.

However he also said Ferguson Marine should not have started work on the boats before the design was agreed.

Ferguson’s ultimately had to rip out some work and start over because of design changes.

Mr van Beek said: “I would not have done it. I would have said this is just not specified enough.”

He added: “There were faults on both sides - no doubt about it.”

The committee previously heard that the relationship between Ferguson Marine managers and CMAL broke down completely in the latter stage of the contract, and work ground to a standstill.

Mr van Beek confirmed the relationship had broken down to the point where it became “very adversarial”, and that he had informed SNP Finance Secretary Derek Mackay.

He said he had met with CMAL bosses on several occasions.

He said: “On every occasion I met with them they were remarkably difficult to deal with.

“On at least two occassions they were very aggressive.”

He added: “There were some things that CMAL were doing that were very unhelpful.

“On top of all that they were adamant they did not really want to discuss ways of making the situation better.”

He said CMAL had “no interest” in compromising and rejected one idea “out of hand”.

He said: “They thought it would be better that Ferguson’s went into administration.

“I saw first hand and had some very difficult meetings with CMAL where they had no interest in compromising.”

He said he had been surprised his recommendation that the dispute be settled through arbitration was not taken up and the yard was ultimately nationalised.

“CMAL absolutely refused to consider it,” he said.

He also said CMAL did not actually want the specific type of vessels being built by Ferguson, in particular they did not want to be dual fuel, meaning they could use Liquified Natural Gas (LNG) as well as traditional diesel.

“I never got an answer as to why these ships were dual fuel,” he said.

Mr van Beek also confirmed the public loans were "significantly aligned" to helping through cash flows problems, rather than the other uses claimed by the SNP Government in public.

He also confirmed the public loans were "significantly aligned" to helping through cash flows problems, rather than the other uses claimed by the SNP Government in public.

Tpy committee member Jamie Greene said: “The plot thickens with every piece of evidence this inquiry hears. SNP ministers from the First Minister down are mired in this shambles.

“The taxpayer is out of pocket to the tune of £230m, no new ferries have been delivered for our island communities, and now the SNP is doing everything it can to cover up this scandal.

“This goes straight to the top of the SNP Government and the time for apologies has long past.

“The First Minister, her finance secretary and a raft of SNP ministers must be properly held to account over their gross incompetence and negligence.

“Jim McColl is right in demanding that only a full public inquiry, with witnesses giving evidence under oath, will unearth why hundreds of millions of pounds of public money has been so badly mishandled by the SNP.”

LibDem committee member Mike Rumbles said: “Jim McColl’s evidence to the Committee was astonishing. There was a problem with this contract right from the outset.

"The First Minister undermined it by being more interested in PR gloss than setting the project out on the right footing.

“Hundreds of millions of pounds of public money is the cost of Scottish Government incompetence.

“This project is running years behind schedule, communities aren’t getting the boats they were promised and there are now serious questions about whether they ever will.”

Glasgow's Fight for Equal Pay (20/12/19)

As regular readers know the Scottish Government has stayed well out of the way during Glasgow's long fight for equal pay - so have the city's MSPs, of course, who have had very little to say for themselves over the past 15 years.

But here's an interesting article from The Times which reports that the taxpayers bill for two new CalMac ferries could reach £300 million.

I find it intriguing how public money can be found for some things but not others.

Especially as Scotland's public spending watchdog, the Accounts Commission, concluded after an investigation in 2017 that a 'decade long failure of leadership by local and central government' was responsible for the continuing debacle over equal pay. 

If you ask me, Glasgow's ongoing battle over equal pay is every bit as deserving of the Scottish Government's support because the cost of replacing the Council's 'unfit for purpose' WPBR won't come cheap.



Jim McColl: Taxpayer could face £300m bill for CalMac ferries

By Greig Cameron - The Times

Jim McColl, who saved the Ferguson Marine shipyard in 2014, accused ministers of taking risks - ALAMY
One of Scotland’s richest men has accused the government of playing “fast and loose” with public money and warned that a bill for two new ferries could reach £300 million.

Jim McColl has reacted with fury to a report on the cost of completing the CalMac ships. The report blamed management at the Ferguson Marine shipyard for poor planning and a lack of control over the project.

His company Clyde Blowers Capital had rescued the Port Glasgow yard from administration in 2014. The following year it won a contract from Caledonian Maritime Assets (CMA), a government quango, to build two new ferries for £97 million.

A dispute over delays, design changes and spiralling costs led to the yard going into administration in August. The Scottish government nationalised the business this month and has suggested that at least another £94 million will need to be spent.

Mr McColl, 67, sits on Nicola Sturgeon’s Council of Economic Advisers but has been at loggerheads with her government over Ferguson.

“The government’s behaviour since we started raising serious concerns has been very, very poor,” he told The Timesyesterday. “They could have taken a stronger leadership role two to three years ago and we wouldn’t be in this situation today.

“They are playing fast and loose with public money here. Private enterprise is accountable for the money but these guys are not taking sound decisions based on the economics of it.”

Mr McColl suggested that about £135 million had been spent on the two vessels so far, including a £45 million loan from the government to Ferguson. He fears that the final bill is likely to exceed the revised projection of almost £200 million and could end up being between £250 million and £300 million.

This week the Scottish government released almost four years of correspondence and reports linked to Ferguson. Mr McColl suggested that there was still a lack of transparency because several documents, which he claimed were less complimentary about the involvement of CMA and Holyrood, had yet to be released.

Mr McColl pointed out that Luke van Beek, who was brought in as an independent overseer, had suggested that the problems were not of Ferguson’s making. The shipyard had been approved to be part of the Royal Navy Type-31 frigate building programme.

Mr McColl said: “They are sitting on information which would be more damaging and have put out this report to divert attention. I am very confident that a proper independent inquiry will expose the real issues here. That is what they are trying like hell to avoid.”

The Scottish government said that its release of documents had not been “exhaustive” as some materials were commercially sensitive. A spokesman said that the turnaround director appointed to Ferguson was confident about the cost of delivering the ferries.

Mr McColl, who is worth about £1 billion and is based in Monaco, disputed several items in a government-commissioned report, including a claim that the hulls were rusting. He said that the ships were in a good state when handed over in early August.

• An inquiry is to be held into the construction and procurement of new ferries after the collapse of the Ferguson shipyard. MSPs on the Holyrood rural economy and connectivity committee will consider the updated costs and timetable for the completion of the two ferries, the government’s decision to nationalise the yard and the potential implications for future procurement of maritime vessels.

Scottish Government and Equal Pay (27/09/19)

SNP ministers lose public £135m in bad loans and investments

By Tom Gordon - The Herald

Finance Secretary Derek Mackay during a visit to Edinburgh tech company CodePlan after GDP figures were announced. STY GORDON.Pic Gordon Terris/The Herald.18/9/19.

SNP ministers have been forced to write off almost than £135m of taxpayer loans and investments used to prop up failing companies.

The Scottish Government’s consolidated accounts for 2018/19 show massive write-offs for the Ferguson Marine shipyard, Prestwick Airport and BiFab engineering.

The Scottish Government has done its level best to stay out of the long fight for equal pay in Scotland's councils.

Even though a major report from the Accounts Commission (Scotland's public spending watchdog) in September 2017 described this as "a decade long failure of leadership by local and central government". 

But as ever Governments can dig deep and find extra money when they really want to as The Herald reports via this tweet from Tom Gordon.


Equal Pay - 'Decade Long Failure' (07/09/17)

The Herald's Tom Gordon reports on a special investigation by the Accounts Commission which concludes that a 'decade long failure of leadership by local and central government' is responsible for the continuing debacle over equal pay. 

Glasgow City Council, Scotland's largest, has been fighting a desperate battle against equal pay for the past ten years and its pay arrangements are still shrouded in secrecy - as opposed to being 'open, honest and transparent'.

The Court of Session recently judged Glasgow's revised pay arrangements and its in-house job evaluation scheme (JES), introduced in 2007 to be 'unfit for purpose' - as a result the number of equal pay claims in Glasgow is growing by the day.

If Scotland's largest council can't or won't get its act together, maybe the solution in Glasgow is to send in the Accounts Commission to uncover what has really been going on for the past 10 years.



Watchdog report exposes litany of failures behind £1bn equal pay bill

By Tom Gordon - Scottish Political Editor, The Herald

Glasgow City Chambers

A DECADE long failure of leadership by central and local government has left taxpayers with a bill of more than £1billion for equal pay claims from female council staff, it has emerged.

In a damning study of politicians stalling and ducking responsibilities, the Accounts Commission said around £750m had been spent settling pay claims since 2004.

However a further 27,000 claims are still live, including a recent one from more than 6000 workers in Glasgow which could cost the city £500m, pushing the final bill far higher.

The watchdog blamed “a lack of collective national leadership to overcome challenges and address equal pay issues in a timely way”, with ministers failing to give councils extra funds to help stave off challenges, and authorities in denial about the scale of the problem.

Male-dominated trade unions protecting the higher wages of male workers, often through spurious bonuses, were also a factor.

In order to fix pay anomalies a UK-wide deal, the Single Status Agreement, was established in 1999 to unify pay structures.

Councils were given until 2004 to carry out job evaluations so that women in roles such as caring, cleaning and catering were no longer paid less than men doing equivalent work such as gardening, gravedigging or bin collection.

However only one council met the deadline, and it was not until 2010 that all of Scotland’s councils had single status in place.

Without funds from central government to harmonise pay scales properly, councils failed to make the issue a priority and skimped on deals, sometimes adding to the discrimination by allowing bad practices to continue in order to avoid industrial action.

They also paid 50,000 women £232m in compromise deals to give up claims to back pay.

There were “often of a relatively low value” compared to what they were due.

Partly because many offers were inadequate, and partly because no-win no-fee lawyers became involved, around 70,500 equal pay claims were lodged against councils after 2004.

Of these around 27,000 are outstanding, and new claims are still being brought.

Highlighting the painfully slow progress, the report said: “Thousands of claims currently in the system in Scotland have been live for over a decade.”

The watchdog also complained it had faced “considerable difficulty” due to a lack of good quality data relating to the implementation of equal pay.

It recommended that councils ensure all pay arrangements are fair and transparent.

Commission member Pauline Weetman said: "Equal pay is an incredibly important issue and a legal duty for Scotland's councils to eliminate decades of inequality. However, implementation of equal pay has been a substantial challenge for local government."

The council umbrella body Cosla said it welcomed the report’s recognition that councils had faced “complex judicial processes and huge costs” as they tried to deliver equal pay.

“Councils have endeavoured to settle all legitimate claims as quickly as possible,” it said.

Equal pay campaigner Mark Irvine, who has helped many female workers bring claims against council bosses, said the issue remained a “national disgrace”.

He said: “The report hits the nail on the head. There was an agreement to end discrimination in 1999 and that it’s still happening in 2017 is a terrible indictment of Cosla. Major councils ganged up to prevent low-paid women getting what they were promised 20 years ago.”

The public sector union Unison said the report’s findings were “shocking”.

Scotland regional manager Peter Hunter said: “This study demonstrates the cost of delay and dereliction of duty. If this report compels those remaining councils to resolve outstanding claims... the Accounts Commission will have played a vital role.”

Scottish LibDem leader Willie Rennie added: “This is a complex process but far too many people, mainly women in low paid jobs, are waiting far too long for the money they are due.

"The Scottish Government needs to work with councils to seek a speedier solution.”

“It is time for this legacy of inequality to be resolved.”